Insurance commissioner: 'We'll be ready' when ACA deadline comes

New Jersey will be ready Oct. 1 when the federal government launches the new health insurance exchange under the Affordable Care Act, Commissioner Ken Kobylowski said this morning during a state Chamber of Commerce event at Forsgate Country Club, in Monroe Township.

Horizon Blue Cross Blue Shield of New Jersey, the state's largest health insurer, will participate in the exchange, as will AmeriHealth NJ. UnitedHealthcare and Cigna said today they will not take part in the New Jersey exchange in 2014.

The Department of Banking and Insurance is now reviewing a license application from a new insurance company that plans to participate in the exchange: Freelancers Co-Op of New Jersey, which is being created and funded by the ACA, Kobylowski said.

The commissioner said "we'll be ready by October 1," when insurers are supposed to begin enrolling customers in exchange health plans that take effect Jan. 1, 2014, when the ACA requires most Americans to either get coverage or pay a penalty. The federal government will provide low- and moderate-income New Jerseyans with subsidies to help them afford to buy coverage on the exchange; a study several years ago by the Urban Institute estimated about $700 million a year in subsidies will flow to New Jerseyans to help them buy health insurance.

"The exchange is going to be up and running. We will meet all the deadlines the federal government has imposed on us and we'll have it ready to go," Kobylowksi said.

Health insurance premiums likely will be higher in 2014 than they are today, Kobylowski said, but "I don't think we're going to see some of the increases (being forecast) in some other states."

In the 1990s, New Jersey adopted some of the health insurance regulations the ACA extends to the entire country in 2014 — such as a ban on medical underwriting, which in other states can make it difficult or impossible for the sick to get covered. So in New Jersey, "I think we will see some increases but I don't know that we're going to see the massive increases that you will see in other states," Kobylowski said.

UnitedHealthcare, which has 1.5 million customers in New Jersey, has opted not to participate in the state's exchange in 2014, according to Michael McGuire, CEO of UnitedHealthcare New Jersey. UnitedHealthcare operates across the United States and decided not to participate in all its markets in 2014.

"We are very committed to New Jersey, but based on our priorities, and trying to look at where we can continue the level of customer service and affordability we have offered to our members … we're not going to participate in the New Jersey exchange," McGuire said. "This is not about New Jersey, it is really about our priorities and trying to figure out, around the country, what we had to build to get ready for those exchanges."

He said UnitedHealthcare "will evaluate it as we go forward, and look at expanding into more markets in 2015."

McGuire said UnitedHealthcare did not believe it could launch simultaneously on exchanges in the 38 states where it does business. In New Jersey, "we have a very good business, we are growing our small business (market) here — we like New Jersey," he said. "But to be ready to do what we wanted to do, at the levels of high customer service and high product availability — we couldn't pull that all off."

McGuire said in New Jersey, UnitedHealthcare has 24,000 individual market customers and about 100,000 customers in the state-regulated small-group market. The company has a total of 900,000 commercial health insurance members, and a total of 1.5 million members, including Medicaid and Medicare.

Cigna spokeswoman Amy Turkington said the company has decided to sell plans on five exchange markets in 2014 —Arizona, Colorado, Florida, Tennessee and Texas — and won't be on the New Jersey exchange next year. "But that doesn't preclude us from participating in exchanges in more states in the future," she said. Cigna has approximately 470,000 customers in New Jersey.

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Beth Fitzgerald

Beth Fitzgerald reports on health care, small business and higher education. She joined NJBIZ in 2008 after a 34-year career at the Star-Ledger and has been reporting on business in New Jersey since 1978. Her email is beth@njbiz.com and she is @bethfitzgerald8 on Twitter.